The complaints from big retailers like Gerry Harvey about allegedly unfair competition from online sellers seem to be resonating with the federal government.

Three Labor ministers will on Saturday make announcements about shopping and e-commerce, including an inquiry by the Productivity Commission into the future of the retail industry.

Labor is responding to pressure to act against what companies such as Harvey Norman and Myer say is a damaging tax loophole.

Minister for Home Affairs Brendan O’Connor will launch a campaign to ensure GST and customs duty concessions for imports valued below $1000 are not “abused or exploited".

“It’s important people follow the rules and not try to rort the system," Mr O’Connor said. “Customs will work closely with the retail sector to identify particular areas of risk for non-compliance."

The Productivity Commission will look at whether GST should be charged on imports worth less than $1000. Assistant Treasurer
Bill Shorten
said there was “significant opposition" from consumers to lowering it, “however, we are taking the concerns of retailers seriously".

Mr Harvey, Solomon Lew, Myer boss Bernie Brookes and Westfield Group chairman Frank Lowy have complained that the GST laws give an unfair advantage to foreign online shopping websites like Amazon.com and eBay. Harvey Norman and Myer said they would set up offshore websites to exploit the $1000 limit.

The strong Australian dollar, cheaper prices overseas, and the absence of GST have led to a jump in internet purchases this Christmas. Australian retailers have told the government it is hurting their businesses.

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Customs figures show a jump in imports valued at less than $1000 in the past financial year – up 17 per cent to just under 7.78 million clearances, versus a 5 per cent rise for goods over the threshold. The government wants to test local retailers’ claims that dodgy businesses are importing multiple batches of goods, worth about $999, and selling them through “pop up" shops, markets and online.

The “crackdown" will start in January and will involve the Australian Customs and Border Protection Service collecting data to detect whether such activity is rife. The government will then consider what needs to be done.

An Access Economics report on household e-commerce activity, to be released by the Minister for the Digital Economy,
Stephen Conroy
, estimates that up to 80 per cent of the $24 billion in online retail sales last year was spent at local online retail outlets. It says retailers could boost their online presence.

The government will hold a forum in early 2011 to help retailers explore online options. Mr Shorten will release terms of reference for a Productivity Commission inquiry into the future of Australian retail, which will consider the impact of globalisation on the industry. It will examine the structure, efficiency, employment and the role of online purchasing in giving consumers greater choice, access and convenience.